Nairobi-based Kotani Pay has raised $2 million in a pre-seed funding round led by P1 Ventures, with participation from investors including DCG/Luno and Flori Ventures. The startup aims to simplify cross-border remittances for the underbanked populations in Africa by using blockchain technology and stablecoins to reduce transfer fees. It plans to expand to Rwanda, Senegal, Ivory Coast, Tanzania, and Nigeria.
Kotani Pay offers its technologies as a B2B solution, connecting crypto platforms’ smart contracts and mobile money APIs. The platform’s average transaction size is $150,000, and it monetizes through an interchange fee, which is around 1% of the gross transaction volumes.
The startup is set to introduce other products, including Reconset, a Reconciliation-as-a-Service offering, and Money Ledger, a Ledger-as-a-Service solution, after acquiring Nigerian startup Fuhlstack.
Note: Kotani Pay’s approach to using blockchain and stablecoins for cross-border remittances addresses the high transfer fees that have traditionally plagued this sector in Africa.